Kumo, a name sources say is not final, is expected to include more than just changes to the look of Microsoft's search engine. Among the expected enhancements is the inclusion of semantic search technology Microsoft got as part of last year's purchase of Powerset.

The software giant has a considerable game of catch-up to play as it has continued to trail Yahoo and Google despite years of investment. According to March numbers from Nielsen Online, Microsoft had 10.3 percent of the U.S. search market, as compared to 15.8 percent for Yahoo and 64.2 percent for Google.

Update at 2:24 p.m. Wednesday: Nielsen Online numbers for April show Microsoft having 9.9 percent of the U.S. search market, as compared to 16.3 percent for Yahoo and 64 percent for Google. (We had previously reported that the numbers for March and April were coincidentally the same, but it now appears the Nielsen report we were looking at for April had mistakenly used March figures and has since been corrected. A readers tells us Nielsen confirmed to him that the initially posted numbers were wrong.)

Staff writer Ina Fried contributed to this report.

This search result for Zune, seen on Live Search by enthusiast Ryan Rea, bears a significant resemblance to the Kumo prototype that Microsoft has been testing internally. (Click for larger version)
Ryan Rea (aka volvoshine)